Comprehensive scenario analysis for mitigation of risks of the maritime traffic in the Strait of Istanbul

In this paper, the results of a scenario analysis are presented using the models developed by the authors in their prior work. Therein an aggregate risk-simulation model of the maritime traffic in the Strait of Istanbul was developed giving consideration to traffic rules, vessel profiles, pilotage services, meteorological, geographical conditions, and vessel scheduling. A risk assessment was carried out by incorporating a probabilistic accident risk model into the simulation model to establish a baseline level of risk. Herein, 16 scenarios are described as modifications of the baseline scenario for the purpose of studying maritime risk mitigation in this geographic context. We have evaluated the impact of several factors such as vessel arrival rates, vessel pursuit distances, number of pilots, local traffic density, and vessel scheduling practices such as the single-lane traffic regime start time on safety risks. We also present a discussion on the impact of each factor on vessel passages and waiting times at both entrances of the Strait. We conclude with risk mitigation recommendations that reduce both risk and waiting times, and thus can be considered ‘win-win’ from both an operational and risk reduction perspective.     

The effect of organizational structure on efficiency: Evidence from the Spanish insurance industry

This paper provides new information on the effects of organizational structure on efficiency by analyzing Spanish stock and mutual insurers over the period 1989–1997. We test the efficient structure hypothesis, which predicts that the market will sort organizational forms into market segments where they have comparative advantages, and the expense preference hypothesis, which predicts that mutuals will be less efficient than stocks. Technical, cost, and revenue frontiers are estimated using data envelopment analysis. The results indicate that stocks and mutuals are operating on separate production, cost, and revenue frontiers and thus represent distinct technologies. In cost and revenue efficiency, stocks of all sizes dominate mutuals in the production of stock output vectors, and smaller mutuals dominate stocks in the production of mutual output vectors. Larger mutuals are neither dominated by nor dominant over stocks in the cost and revenue comparisons. Thus, large mutuals appear to be vulnerable to competition from stock insurers in Spain. Overall, the results are consistent with the efficient structure hypothesis but are generally not consistent with the expense preference hypothesis.     

Testing contingency hypotheses in budgetary research: an evaluation of the use of moderated regression analysis

In the contingency literature on the behavioral and organizational effects of budgeting, use of the Moderated Regression Analysis (MRA) technique is prevalent. This technique is used to test contingency hypotheses that predict interaction effects between budgetary and contextual variables. This paper critically evaluates the application of this technique in budgetary research over the last two decades. The results of the analysis indicate that the use and interpretation of MRA often do not conform to proper methodology and theory. The paper further demonstrates that these problems seriously affect the interpretability and conclusions of individual budgetary research papers, and may also affect the budgetary research paradigm as a whole.     

Intra‐industry bankruptcy contagion: Evidence from the pricing of industry recovery rates

How does bankruptcy contagion propagate among industry peers? We study the debt recovery channel of industry contagion by examining whether the cost of a company's debt is affected by the observed recovery rates of its bankrupt industry peers. Our results show that lower industry recovery rates are associated with higher loan spreads, but only when the contracts were originated during industry bankruptcy waves. Consistent with the debt recovery channel of industry contagion, we find that the negative effects of industry recovery rates are significantly stronger under situations where the effect is expected to be more salient.     

Industrial slavery in the United States: the North Carolina turpentine industry 1849-61

The operation of the North Carolina turpentine industry in the late Antebellum period (1849-61) depended upon labour supplied by slaves who were either owned or hired. The nature of the work, which covered thousands of acres of forestland, led to the use of a task system whereby each slave was assigned a large tract of forest that was worked with little supervision over several months. An important finding is the content and significance of the production records for the slaves assigned to these long-term tasks. The slaves, like those in other industries and on plantations, could earn a certain amount of money for themselves by taking on extra chores. Details of those payments appear in these records. The conditions of life, including food, clothing, and the forest environment are reconstructed where possible. The records raise some questions about the relationship between the payments, extra work and slave behaviour which however, remain unanswered.     

Employee perceptions of market orientation in the banking industry: A case from a developing country

The importance of this study stems from the desire to measure the market orientation of banks in a developing country such as Ghana, where the concept of market orientation is still a new practice. Specifically, the study was meant to investigate employee perceptions of market orientation and how they differ in relation to employment status within a bank in a developing country. A slightly modified questionnaire based on Kohli, Jaworski and Kumar's market orientation scale (MARKOR) was used. The outcome of the study reveals that the MARKOR scale provides a good measure of market orientation in the Ghanaian banking environment. Although the general perception of market orientation is somewhat moderate, the findings further reveal that the management of the bank has a higher perception of market orientation than employees. Some recommendations have been provided for Ghanaian banks and their counterparts in other developing countries on the need for them to be market oriented.     

Industry upheaval and valuation: Empirical evidence from the international oil and gas industry

Accounting literature suggests that contemporaneous earnings are more useful than current operating cash flow in predicting future cash flows and, therefore, also more relevant for company valuation. However, recent research indicates that elevated levels of merger and acquisition activity or a changing economic environment may reduce the value relevance of earnings. Using the oil and gas industry as a case, this paper examines how the oil industry upheaval in the late 1990s influenced the value relevance of financial statement information. We extend the literature by testing for a structural shift in the equity market valuation process. Our results provide evidence of a structural break in the value relevance of accounting information. In contrast to prior research, we find that the value relevance of cash flows actually decreased in the recent oil industry upheaval. On the other hand, the value relevance of book equity increased. Furthermore, we find that accounting-method choice (full cost versus successful efforts) affects the value relevance of accounting information.     

Common ownership and bank stability: Evidence from the U.S. banking industry

We empirically test competing theoretical arguments about the impact of common ownership on bank stability: the common ownership hypothesis, where banks decrease risk-taking by internalizing risk externalities on commonly held banks, and the diversification hypothesis, where banks increase risk-taking influenced by common owners who hold diversified portfolios and are less risk averse. Using data from the U.S. banking industry from 1991 to 2016, we find that banks with more common ownership linkages undertake lower risk, as predicted by the common ownership hypothesis. This relation is statistically significant and economically sizable, which is consistent across alternative measures of common ownership and bank risk and robust to potential endogeneity. Our study adds the financial stability perspective to the ongoing discussions on common ownership and antitrust regulations.     

A framework for the analysis of interview data from multiple field research sites

In general, papers reporting the results of research studies disclose little detail regarding attributes of study design, analytical processes and methods actually used by researchers. This paper describes in some depth the method choices and analytical protocol used in a field study project. The paper describes initially the link between research question, research design and analytical protocol. The major focus of the paper is the application of a systematic analytical protocol designed to encourage completeness and impartiality in the collection and analysis of qualitative data. These method issues are examined in the context of the author's experiences in the field and through the process of data analysis. The methods used are also examined critically in retrospect.     

Financial reporting by charities: a matched case study analysis from four countries

This paper analyses financial reporting requirements applicable to charities in four jurisdictions—Australia; England; Ireland; New Zealand—using case study analysis which compares the actual financial statements of four charities operating in the same field and with similar levels of total income. The authors highlight common issues and implications in terms of the concepts underpinning not-for-profit organization (NPO) financial reporting and argue the case for harmonized international NPO accounting standards.     

The environmental disclosures of the electricity generation industry: a global perspective

The electricity generation industry has been under close regulatory and public scrutiny for decades for the significant impacts its activities have on the environment. The industry is responsible for a large proportion of greenhouse gas (GHG) emissions, which has intensified public and regulatory scrutiny of late. Therefore, electricity generation firms face immense pressure to show environmental responsibility. Firms respond with environmental disclosures in their annual reports, in stand-alone-reports, and on websites. In this study, we use comprehensive disclosure indices to measure the quality (or comprehensiveness) of the CO₂ emissions related disclosure and the overall environmental disclosure of 205 electricity generation firms in 35 countries. We find that firms in countries with a high commitment towards the environment and a carbon emissions trading scheme (measures of social concern for environmental protection and emissions), are likely to disclose more comprehensive environmental information. In addition, we find that firm size, age of the assets, listing status, and media exposure influence disclosure. Environmental performance, measured by CO₂ emissions, is not significantly related to environmental disclosure among our sample firms. The theoretical implication of these findings is that social beliefs (that are different in different countries) prompt a legitimating disclosure response from firms that is not significantly affected by their performance against that social belief.     

Risk Interpretation of the CAPM's Beta: Evidence from a New Research Method

This study tests the validity of using the CAPM beta as a risk control in cross‐sectional accounting and finance research. We recognize that high‐risk stocks should experience either very good or very bad returns more frequently compared to low‐risk stocks, that is, high‐risk stocks should cluster in the tails of the cross‐sectional return distribution. Building on this intuition, we test the risk interpretation of the CAPM's beta by examining if high‐beta stocks are more likely than low‐beta stocks to experience either very high or very low returns. Our empirical results indicate that beta is a strong predictor of large positive and large negative returns, which confirms that beta is a valid empirical risk measure and that researchers should use beta as a risk control in empirical tests. Further, we show that because the relation between beta and returns is U‐shaped, that is, high betas predict both very high and very low returns, linear cross‐sectional regression models, for example, Fama–MacBeth regressions, will fail on average to reject the null hypothesis that beta does not capture risk. This result explains why previous studies find no significant cross‐sectional relation between beta and returns.     

Farm food safety and diseases risk assessments: case studies from the horticultural and salmonid farms

This study explores the perceptions of selected fresh produce and salmonid farms on the types and importance of various risk assessments conducted at the primary production level. Both the fresh produce and salmonid farms in this study are vigilantly conducting risk assessments to prevent or reduce potential food safety and infectious diseases from occurring. The participating farms generally carried out at least eight types of risk assessments such as health and safety, water, workers’ hygiene, site assessment and pesticides/veterinary medicines on an annual basis. Health and safety, pesticides/veterinary health, fresh produce safety and fish health assessments are some of the most important types of risk assessments for the farms. Most farms will continue with the good practice of conducting risk assessments even if it is not required by their customers or regulations but would prefer to reduce the amount of paper/electronic-based risk assessments.     

Managing toxic chemicals in Australia: a regional analysis of the risk society

The paper takes examples from two decades of toxic risk management in Australia in order to examine the challenges that the conditions of the ‘risk society’ pose for the chemicals industry in this country. These issues for corporate governance are set against a shift in political discourse in the direction of the limiting of the state, co‐governance between state and industry, and new community involvements and responsibilities. The paper describes new social movements and alliances influencing corporate structures and processes for decision making in Australia. The case examples lead to conclusions concerning the fundamental innovations in the organizational design of regulatory bodies and corporations that are required if progress is to be made towards sustainability and the re‐establishment of public trust. The findings of this paper are symptomatic of the more general challenges that the ‘risk society’ poses for the mainstream political programmes and their frameworks for regulation, for corporate architecture and for the relationships between governments, corporations and the community.     

The effect of predation risk on cash holdings: Empirical evidence from the U.S. property‐liability insurance industry

Corporate cash holdings play a significant role in the U.S. property‐liability insurance industry yet the topic of insurer cash holdings policy has largely been overlooked by prior empirical research. While a number of studies have investigated firm‐specific factors related to cash holdings in the insurance industry, prior research has not examined how market concentration and potential predation risk impact cash holdings. We propose a new measure of market concentration and provide evidence in support of the predation risk theory. Specifically, we show that insurers exposed to more concentrated markets tend to hold more cash. Furthermore, the relation between market concentration and cash holdings is influenced by access to internal capital. While unaffiliated insurers without access to internal capital hold greater levels of cash in more concentrated markets, group insurers with access to internal capital do not hold greater levels of cash to mitigate predation risk.     

Refining the bootstrap method of stochastic dominance analysis: The case of the January effect

This study investigates the effect of sample size and population distribution on the bootstrap estimated sampling distributions for stochastic dominance (SD) test statistics. Bootstrap critical values for Whitmore's (1978) second- and third-degree stochastic dominance test statistics are found to vary with both data sample size and variance of the population distribution. The results indicate the parametric nature of the statistics and suggest that the bootstrap method should be used to estimate a sampling distribution each time a new data sample is drawn. As an application of the bootstrap method, the January small firm effect is examined. The results conflict with the SD results of others, and indicate that not all investors would prefer to hold just a portfolio of small capitalization firms in January.     

Management controls and modern slavery risks in the building and construction industry: Lessons from an Australian social housing provider

Modern slavery presents a complex risk for organisations worldwide, with perpetrators continually adapting practices to maintain a veil of secrecy. While management controls may reduce modern slavery risks, little is known about how they optimally function across industries and organisational forms. To advance the state of knowledge, we examine an Australian not for profit housing provider using an interventionist research method. We draw on a combined conceptual framework of management controls and expectancy theory to analyse participant observations and document data collected over 24 months. Our findings show that despite constraints, the organisation reduced modern slavery risks. This outcome, informed by a social purpose within the organisation, was facilitated through the introduction and adaptation of cultural, personnel, action, and results controls. By discussing the changes this housing provider made, we add to the literature on management controls and modern slavery and provide theoretical insights into why they were adopted. We also highlight limitations in what the organisation could achieve that point to areas for future research.     

Drivers of research impact: evidence from the top three finance journals

We study the characteristics of all published papers in the top three finance journals (JF, JFE and RFS), and how these paper characteristics affect the number of citations in Google Scholar and the Web of Science database. First, we find the characteristics in the universalist perspective remain constant while the characteristics in the constructivist and presentation perspectives increase over time. Second, some characteristics are significantly different between the high-impact and the low-impact papers. Third, paper quality, research method, journal placement and paper age are the most important drivers. Last, different drivers play different roles in different journals.     

Reasoning about safety management policy in everyday terms: a pilot study in citizen engagement for the UK railway industry

This paper reports on a pilot study in citizen engagement which formed part of a broader stakeholder engagement and consultation programme addressing safety decision‐making for UK rail industry activities. In addition to developing tools to support engagement initiatives, the study was concerned specifically with investigating everyday lay notions of what is a ‘reasonable’ basis for establishing safety. In view of the technical complexity of this issue, the exercise therefore presented an important methodological challenge: how to ‘translate’ specialised economic and legal issues in such a way that lay citizens were able to grasp, and reason about, these issues in an informed and considered way. The engagement exercise worked well in terms of its capacity to promote such a process of informed consideration, and in being ‘user friendly’ for participants. Despite the exercise involving a relatively small number of discussion group meetings, the quality and depth of the evidence collected allows some cautious provisional conclusions to be drawn regarding lay sensibilities concerning certain technical aspects of rail safety management.     

The impacts of risk-taking behaviour and competition on technical efficiency: Evidence from the Chinese banking industry

This paper tests the impact of risk and competition on efficiency in the Chinese banking industry over the period 2003–2013. Comprehensive types of risk-taking behaviour are considered including credit risk, liquidity risk, capital risk, and insolvency risk. Competition is measured by the Lerner index. The results are cross-checked using an alternative econometric technique as well as an alternative competition indicator. The findings show that the technical and pure technical efficiencies of Chinese commercial banks are significantly and negatively affected by liquidity risk. They further show that greater competition precedes declines in technical and pure technical efficiencies of Chinese commercial banks. The results suggest that Chinese bank efficiency is significantly affected by bank diversification, banking sector development, stock market development, inflation and GDP growth rate. The findings also indicate that, compared to state-owned commercial banks, joint-stock commercial banks and city commercial banks have lower technical and pure technical efficiencies.